Liberating education in the debt society

Students around the country – not just in California – are protesting in unity against the state of affairs that turns our brightest students and most ambitious academics into debt slaves of the modern banking system.

As the price of education has risen at a pace matched only by medicine and the military, it is the very young adults who are trying to improve themselves and their communities who are being left with big bills that will take decades to pay off completely once the interest is added in.  While some federal loans allow students to avoid most of the predatory rates, these legislatively set funds can only cover a small part of the total cost at today’s university tuition schedules.

The inefficiency of our educational funding is a wide-ranging issue that does not stop at the local university – these financial problems follow our young professionals throughout their productive lives.  As an example, most medical doctors are graduating with a total debt load of around $250,000 – and that cost is going to primarily benefit the banks who lent the money at the expense of those who need the doctor’s services.  So while defenders of the status quo will often point to the relatively high incomes of our doctors, they do not seem to notice how we have fewer doctors per capita or that they report a lower job satisfaction and general happiness with the work they do.

Maybe if they weren’t constantly worried about paying off debts?  Maybe if they could work as free human beings with a passion for doing good, and not as a slave who must labor just to be fed?

Free education will benefit everyone in the long run.  Its not just about the students, its about the jobs they will create and the problems an educated population can solve.  Perhaps most importantly of all, its about the freedom of those who chose to pursue knowledge to then seek whatever goals they feel compelled to tackle as opposed to the ones that currently pay enough to satisfy some bank’s balance sheet.  We really don’t need another generation of MBAs right now…

The Real Bubble – American Debt

The real reason our economy is so weak today is actually the same reason why it had been so strong over the last 20-30 years. A massive acceptance of debt spurred new jobs, new consumption, but very little in terms of long term investment in education, infrastructure, or really anything that can produce future wealth.


For a better sense of relative debt loads, notice the strong resemblance between our current debt bubble and the last massive debt bubble that kicked off the start of the Great Depression.  This second chart is in terms of GDP percentages, rather than nominal (inflation-distored) dollar amounts.


Unfortunately, we’ve got a tough ahead of us in terms of paying back debt relative to our GDP and income. With government borrowing and creating new debt, the responsibility will be left to private corporations and individuals. Some public debt may help cushion the fall, but at some level we’re going to have to deal with what we already spent and consumed and promised.

Credit card vendors leaving college

An insane tradition of American debt-based consumerism is the marketing of credit cards on campus, to students.  Not only are the students likely to be buried by existing student loan debt, they’re also faced with an onslaught of offers for new credit.

And when you’re broke on campus, it can be hard to say no to another “eat now” and “pay later” type of arrangement.

But what happens when the jobs aren’t there for graduates like we’ve seen so recently?  Many students will be left with huge penalties and horrible credit records for life just because they graduated in the wrong year.

At the very least, efforts to lend to students will be declining across the board.  Instead, the government will take out debt on your behalf.  You’ll still get to pay it back, but they’ll decide how to spend the cash now.

Oh, but you’re hungry now?

Its something to think about while we congratulate the government for “liberating us from debt.”  They’ve done more than any single bank to ensure that we’re all on the hook.

Congress does something right – kicks banks out of student loan guarantees

The federal student loan policy over the last twenty years has been an exceptional case of failure.  Despite costing the government tons of money, they somehow managed to “privatize” the profits of these debts.

So while we see a downturn in students becoming doctors, we have to wonder if that has something to do with the fact that medical students end up with $200,000 in student loan debt before they’re licensed to practice medicine.

Maybe kids heading to college can save a few bucks on interest rates, and maybe the tax payers of America can even save a few bucks by cutting out an unnecessary middle-man.

Dollar keeps falling

Gold and oil show big gains today as the US dollar continues to fall.

While the devaluation will make existing debts theoretically easier to pay back, it also diminishes American’s wealth and drives up the cost of basic living expenses such as food and transportation.

The net effect for most Americans, despite the nominal gains in equity values, is a reduced standard of living.

Debt Is…

The past tense of debt is consumption

The present tense is maintenaince

And the future tense is austerity

Enjoy your stimulus! I hope you at least got a new car out of it…